Nymex (Energy Markets) declares force majeure (Halt In Trading)

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http://www.marketwatch.com/news/story.asp?guid=%7B2F2C8737%2DB1ED%2D469E%2DAFBB%2D06B6452A0A49%7D&siteid=mktw

NEW YORK (MarketWatch) - Deliveries of natural gas for August have been halted for an indeterminate amount of time under a force majeure declaration by the New York Mercantile Exchange Monday.

Force majeure, which take effect in times of natural disasters, came into play before Hurricane Katrina began to roar through Louisiana, suspending contractual obligations and regular business operations. In preparation for the storm, Sabine Pipeline, which operates the Henry Hub facility in Louisiana, on Sunday closed delivery in and out of the site until further notice.

Henry Hub is the pricing point for natural gas futures contracts traded on the Nymex. It connects with nine interstate and four intrastate pipelines.

The September contracts for natural gas expire Monday, and Dow Jones reported that delivery had been scheduled for Thursday. Nymex did not immediately return calls seeking comment.

On the Nymex, September natural gas leaped 17.8%, or $1.738, to $11.53 per million British thermal units. October natural gas, which becomes the front month contract at Monday's close, rose 16.8%, or $1.644, to $11.45. See Futures Movers.

"A shutdown to Henry Hub is a crisis situation for the markets," said Agbeli Ameko, managing partner at First Enercast Financial. "Thus, as futures expire, there will be no facility for gas delivery. This is an unpreceedented situation that has never happened in the history of the NYMEX futures contracts."

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